EV Fleet Accelerator Findings & Recommendations - JULY 2021 - BT
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
EV Fleet Accelerator Findings & Recommendations J UL Y 2 0 2 1
About the EV Fleet Accelerator
Contents
Formed by the CEOs of bp, BT, Direct Line Group, Royal
Mail, Scottish Power, Severn Trent and Tesco, the EV
Fleet Accelerator (EVFA) aims to use electric fleets as
a catalyst to accelerate the widespread conversion to
04
EVs across Britain. This group constitutes the owners Executive summary
and operators of some of the biggest van fleets in the Overview
country, complemented by infrastructure, energy, retail
Building back better
and insurance and repair capability.
Next steps
10
Keith Anderson Liv Garfield Penny James
Scottish Power Severn Trent Direct Line Group
Section 1.
Future-proofing the electricity
network infrastructure
Philip Jansen
BT
Bernard Looney
bp
Ken Murphy
Tesco
18 Section 2.
Enabling the UK-wide rollout
of charging infrastructure
26 Section 3.
Overcoming demand
obstacles
Simon Thompson
Royal Mail
30 Section 4.
Expanding the supply
of UK-made vehicles
Executive summary
Executive Overview
Formed by the CEOs of bp, BT, Direct Line Group, Royal Mail, Scottish Power,
summary Severn Trent and Tesco, the EV Fleet Accelerator (EVFA) aims to use electric
fleets as a catalyst to accelerate the widespread conversion to EVs across Britain.
This group constitutes the owners and operators of some of the biggest van fleets
in the country, complemented by infrastructure, energy, retail and insurance and
repair capability. This is a complex ecosystem as described in Fig 1.
The UK is in a race to go electric, and electrifying major van fleets can be an Figure 1 – The ecosystem covers a range of industries and Government departments1
important catalyst to accelerate the mass adoption of EVs in Britain. There is a huge
economic prize at stake, with £50bn of private investment ready to be unlocked
with the right incentives and the right action plan. This would place the UK at the
forefront of low emission vehicle technology, increase business and public rollout of
EVs, and create substantial export opportunities.
As things stand, however, we look set to fall short. Van manufacturers point to a lack
of charging infrastructure, the Charge Point Operators (CPOs) cite a lack of demand,
and the fleet operators point to a lack of van availability and high connection costs
at their depots. There is no large-scale UK manufacturer of electric vans, and so
companies like ours who want to buy British today, can’t and are instead sourcing
from France and Germany driving investment and green jobs overseas.
We have a window of opportunity, in 2021, to break this cycle and scale our ambition.
Like other aspects of net zero, that will require detailed delivery plans. Every part
of the chain will require key pieces of Government policy putting in place. From
network infrastructure, to charging points, to manufacturing plants and their supply
chains including batteries, private sector investment can be delivered at pace with
the policy recommendations in this report.
The member companies of the EV Fleet Accelerator want to play our part. We are
therefore committing to ‘buy British’ and to accelerate that spend: provided the
necessary policies are in place to unlock UK manufacturing. It is going to require
strong leadership to bring about the change required. If you agree with the key
points in this report, then we want to work with you to lead this game-changing
opportunity and deliver this profound change to our transport system: ‘a green plan Given over 60% of new car and van registrations in the UK are fleet and
led by the white van.’ business, switching them to electric, alongside the rollout of a national
charging network, will allow faster public adoption in the mass market.
This will drive the second hand market which is the main market for most
consumers and essential to getting more EVs on UK roads. It is a case of
green fleets for clean streets.
There are, however, substantial barriers that need to be overcome to enable
this transformation of road transport, and it is only with business and
government working in partnership that the jobs, skills and infrastructure
can be created and developed to overcome the challenges.
1
Source - EV Technology and REA via the Charge Point Professional ECOSYSTEM industry training course
4 EV Fleet Accelerator Findings and Recommendations 5
Executive summary
There are four focus areas where collaboration is required:
1. Ramp up demand signals • Working with Ofgem and UK network operators to strengthen the
network infrastructure, to ensure that all areas and major routes
2. Strengthen electricity distribution network infrastructure
support universal, ubiquitous and affordable charging. As things stand
3. Expand UK supply chains today, a significant portion of the UK does not have the necessary
4. Ensure a fair distribution of charging points on consumer-friendly platforms infrastructure to support the decarbonisation of transport and we
estimate this could cost over £10bn by 2030 to improve.
This model could be the leading approach to EV rollout in Europe, with the potential to • Expanding the supply of UK-made vehicles: by incentivising van
export it to the rest of the world. We propose showcasing this at COP26 as a tangible manufacturers to re-fit their plant for EVs; and by supporting wider
step for countries in the Energy transition. This is a green plan for the white van. supply chain investments and R&D, including in battery gigafactories.
• Planning reforms that can promote a truly national charging point
infrastructure: including a network of ultra-fast charging sites that are
Building back better within easy reach for all drivers in all communities, from our cities to
our rural villages.
We strongly agree with comments from the Prime Minister and Chancellor that the
• Setting standards and regulation for charging services to ensure
post-Covid economic recovery enables us all to build back better, stronger and greener.
a seamless experience, where systems are inter-connected, and
Applying this to EVs, our analysis of the demand side suggests that existing fleet
consumers never have to think twice about how or where to find the
commitments already set by UK companies will create demand for nearly 700,000
nearest available charging point and be readily able to use it when
electric vehicles between now and 2030, and could be much greater.
they do.
This demand is a powerful signal and will be a stimulus to EV van manufacturing
To achieve this wholesale change, there will need to be notable investments
which can contribute to Original Equipment Manufacturer (OEM) allocation decisions
and commitments from all stakeholders. This report recognises the
in the UK along with the associated supply chain. We would like to create a virtuous
important work that Office for Zero Emission Vehicles (OZEV) is doing on
circle where the demand helps to stimulate British van production which reduces
developing an EV Charging Infrastructure Strategy and Delivery Plan, the
manufacturing costs which in turn enables further demand to make the switch to EVs.
EV Energy Taskforce collaboration with the automotive sector, and the
This also accelerates the removal of government subsidies currently in place. By using
campaigns and initiatives being run by the UK Electric Fleets Coalition. A
the collective strength of the EVFA we can also shape electric vehicle car demand,
holistic approach is essential to success.
particularly as infrastructure issues are resolved, feeding the second hand market and
thereby increasing consumer take-up.
From an industry perspective, we estimate2 the level of investment required
over the next 5 years as £50bn:
The EVFA companies are willing to commit to buy 70,000 British EV vans by the end
of the decade or sooner if availability allows. This represents 10% of the estimated
Activity Investment
total vehicle demand to kick-start this process.
We believe this is an achievable target if government acts on the points set out in Fleet businesses investment in charging/ £11bn
this report. There are additional measures that industry could take to augment these electrical upgrades
demand signals. For example, how to provide meaningful aggregate data to UK CPOs Investment £9bn
Government and manufacturers on what types of vehicles will be needed and on what
time frames; and how to identify those locations where charge points are most urgently Distribution Network Operators (DNOs) £10bn
needed, including in those areas identified as most in need of levelling up. Electrical infrastructure investment
700,000 EV Fleet Vehicles (of which EVFA Buy £20bn
With this level of commitment from major fleet operators, substantial momentum will
British Commitment for 70,000 Vans) = £2bn
exist on the demand side; but additional action is still needed from Government to
support delivery, including: Total £50bn
2
EVFA internal analysis
6 EV Fleet Accelerator Findings and Recommendations 7
Executive summary
This investment in turn, could unlock EV manufacturing in the UK and the associated • Progress on existing barrier-busting initiatives such as multi-street
supply chain investments required. permitting for streetworks (DfT) and the implementation of building
regulations that require new buildings to install charge points
Businesses though need the confidence and the framework to invest over the (MHCLG).
medium to long-term. This report identifies a series of policy measures that, if
• The setting of standards for interoperability of charging platforms,
introduced, could fire the starting pistol on the £50bn+ investment – all in the UK –
ensuring a seamless experience for consumers when they want to
outlined above.
locate, use and pay for charging points.
In the next 12 months: Between 2024 and 2030:
• Department for Transport (DfT) to set out a clear funding framework to
• Treasury addressing VAT disparity between home (5%) vs public (20%)
leverage private investment in charging infrastructure, ensuring public funding
charging.
targets areas less attractive to private investment.
• Treasury providing VAT exemption on sale of second-hand EVs.
• DfT and Ofgem execute the already announced rapid charging funds of £950m
and £300m.
These are big challenges, but they are surmountable. If implemented,
• Commission analysis reviewing potential direct investment in UK gigafactories these initiatives will enable the development of jobs and skills of the
and in the re-fitting of existing manufacturing plants. future, while speeding up business and public adoption of electric cars
throughout the country, in turn helping the UK to meet its Net Zero
• HM Treasury to provide longer-term certainty on duration of existing
commitments.
Government subsidy programs for EV vans, to account for a slower taper in
prices than is likely for cars.
• Clarity on the support that Government will provide to existing manufacturers
as they transition sites over to EVs.
• Ofgem to consult on their policy for DNOs to be ‘providers of last resort’ for EV
charging infrastructure.
In the next two - three years:
• Ofgem’s new price control framework, RIIO-ED2 to allow DNOs to invest in the
electricity network ahead of EV demand.
Next steps
• Government Ministry of Housing, Communities and Local Government (MHCLG) We want to do everything we can to support the Government
and Local Authorities working with key stakeholders such as DNOs and CPOs in getting this right. We believe that this needs a clear,
to ‘fast track’ EV charging infrastructure to support the rapid development of public, integrated plan to bring together all the initiatives we
ultrafast charging sites. describe here with a timetable to make it all happen. If we are
all ambitious, we believe this can be worked up and costed
• DfT/Department for Business, Energy, & Industrial Strategy (BEIS) to introduce
ready for publication at COP26, as a showcase of Britain’s
a Zero Emission Vehicle (ZEV) mandate requiring a rising percentage of Vans
green industrial revolution.
sold by auto manufacturers to be zero emission.
• Local Authorities required to support the growth of charging hubs, alongside
on-street charging infrastructure.
• MHCLG guidance to Local Authorities on how to set low emissions zones
standards (to ensure a degree of compatibility) and for there to be a link
between the establishment of zones and the level of public charging available
within the area.
8 EV Fleet Accelerator Findings and Recommendations 9
1.
Future-proofing the Summary of recommendations:
electricity network • Ensure that DNO price controls reflect the
need to invest in the network ahead-of-need
infrastructure • Review of funding measures to date against
the scale of the challenge
• Fund some of the costs of the EV charging
infrastructure, such as the connection costs
• Regulatory consultation around new DNO
‘provider of last resort’ provisions
10 11
1. Future-proofing the electricity network infrastructure
Overview Scale of investment in networks
By 2030, it is estimated that the number of EVs in the UK will be between 2.7 and 10.6 to facilitate these chargepoints:
million and rising as high as 36 million by 20403. Even the lower end of forecasts, if
reached, will place substantial demands on the UK’s electricity networks.
connections and grid reinforcement
The majority of the investment required to ensure that the electricity
The widespread use of electric heat pumps as a low carbon alternative to gas boilers
networks can support these chargepoints will be in the distribution networks.
will impact peak demand on electricity networks even further. As a result, future
The Climate Change Committee have estimated that rapid uptake of electric
electricity demand for domestic consumers could be two to seven times higher
vehicles and hybrid heat pumps combined could increase total expenditure
than at present4. Similarly, electricity demand as a result of charging fleets of EVs at
on distribution networks by up to £50 billion by 2035, or £1.8 billion per year.5
depots, en route and at home (for those fleets that rely on home-start capacity), will
increase significantly, though this will be highly dependent on how businesses choose
The UK Government’s Rapid Charging Fund (£950m) and Ofgem’s recent
to charge their vehicles.
Green Recovery announcement of £300 million investment, both of which
include funding for new network infrastructure to support the rollout of
These factors will impact generation and demand on both transmission and
ultra-rapid chargepoints at motorway service areas and key trunk roads, are
distribution networks. In turn this will require new skills and capabilities as the focus
welcome steps, but do not go far enough to address the scale of the challenge.
shifts to the dynamic management of local systems in order to meet changing needs.
It is important to both anticipate these impacts and invest over the short to medium-
term to ensure the grid is future-proofed i.e. dynamic and resilient to cope with Figure 3 - Illustration of the challenge of charging EVs for fleets that need
the rising demand. The introduction of local plans for projected EV infrastructure ‘home-start’ capability
requirements would help the regulator, Ofgem, to provide a clear and supportive
framework for investment and delivery in every community.
Figure 2 - Illustration of the need for distribution network reinforcement in North Wales
due to the electrification of heat and transport in different scenarios
‘Field Dynamics EVMap. © Crown Copyright 2021, OS Licence number 100061024.
Background Image Google Maps, 2021
3
House of Commons Library Research Briefing - https://researchbriefings.files.parliament.uk/documents/CBP7480-/CBP7480-.pdf 5
Climate Change Committee, Accelerated electrification and the GB electricity system, April 2019
4
Energy Systems Catapult, Innovating to Net Zero, Mar 2020 – https://es.catapult.org.uk/reports/innovating-to-net-zero/
12 EV Fleet Accelerator Findings and Recommendations 131. Future-proofing the electricity network infrastructure
The importance of flexibility ‘The Deal’ – What’s required from
EV charging could have a significant impact on peak demand in distribution systems Government/regulators
if left unmanaged. Smart charging and vehicle-to-grid (V2G) are two ways to add
flexibility to EV demand: Using existing mechanisms: importance of RIIO-ED2
• Smart charging can reduce peak demand by shifting EV charging to a different The principle of investing ‘ahead-of need’ is already in practice, as network
time of day. companies are repaid for investing in upgrading and reinforcing the grid.
As outlined above, this investment is critical to ensure resilient infrastructure
• V2G technology enables EVs to release electricity back to the network.
is in place to support EV charging as demands on the grid increase.
These measures and others will significantly reduce the impact of EV charging on
Ofgem has recognised the importance of making allowances for
the network.6,7 In turn, for the public, this will accelerate the adoption of EVs and
investment in the grid ahead-of-need to facilitate EV uptake. However, it
deliver lower electricity bills. Government support of the forthcoming smart systems
is now vital to make sure these aspirations are translated into action in
flexibility plan is therefore important, and the hope is that this will lead to the
the forthcoming distribution price controls (‘RIIO-ED2’). We recommend
development of more flexible and interoperable energy services.
that Ofgem set DNOs milestones to meet in terms of penetration levels to
ensure timely installation.
‘The Deal’ - The role of industry in meeting
Promoting EV charging options in areas where the market
this challenge won’t reach
DNOs are ready to invest ahead-of-need in the required grid infrastructure to Under new regulations, DNOs are prohibited from owning, developing,
support the roll-out of EVs. They have already undertaken analysis to understand the managing or operating public EV charge points. However, they can act as
impacts of large numbers of EVs on the network and are developing tools to predict a ‘provider of last resort’ where it can be clearly demonstrated that the
where ‘pinch-points’ are likely to occur. market will not deliver. If a situation arises where a DNO has to act as the
At a more local level, DNOs can provide data on the local network and work together ‘provider of last resort’, it is allowed to own the charging infrastructure
with CPOs to identify where charge points should be best located to ensure cost for five years before carrying out another market engagement exercise.
effective connections to facilitate EV charging infrastructure. By doing this, DNOs would prime the market and promote the timely
development of a comprehensive EV charging network.
There is a clear opportunity for a broad range of stakeholder groups, including CPOs
and DNOs to work closely with Local Authorities to: However, the policy or guidance which sets out how this licence condition will
• Integrate with local heat and industrial decarbonisation ambitions. work in practice has not been provided. Ofgem should develop the necessary
regulatory mechanism now to ensure that, where the DNO ‘provider of last
• Share best practice, local knowledge, and support the cost-effective roll-out resort’ provisions are required, DNOs are appropriately funded for taking on
of EV charging. the role of provider and owner of public EV charging infrastructure.
• Consider what the options are for EV charging infrastructure in specific areas,
for example in areas where regeneration is being planned. Funding a proportion of the costs of the EV charging infrastructure,
such as the connection costs, would also facilitate the delivery of a
• Identify areas where there is a need for public intervention in the delivery of EV
comprehensive network of EV chargepoints and would deliver a tangible
charging infrastructure (whilst deprioritising areas where the market is likely
boost to the EV industry.
to deliver).
We recognise that these ‘provider of last resort’ proposals may have less
relevance for corporate fleets than private vehicles as, in most cases, there
will be a clear commercial need for charging for fleets. It would, however,
6
Consumers, Vehicles and Energy Integration project, January 2020 – https://es.catapult.org.uk/case-studies/consumers- provide greater confidence in the coverage of the network for all EV drivers.
vehicles-and-energy-integration/
7
Vehicle to Grid Britain project, June 2019 – https://es.catapult.org.uk/reports/vehicle-to-grid-britain/
14 EV Fleet Accelerator Findings and Recommendations 151. Future-proofing the electricity network infrastructure
Project PACE
Key Role for DNOs in optimal
and cost-effective site selection
As part of SP Energy Networks (SPEN) wider Strategic Partnership (with
the Scottish Government and Scottish and Southern Electricity Networks),
SPEN has led an innovative pilot project, Project PACE, which provides a
strong framework for DNOs playing an active role in the planning and siting
of cost effective EV charging infrastructure.
Funded by a grant from Transport Scotland, Project PACE is delivering
around 180 EV chargers across more than 40 EV charging hubs in central
Scotland (North and South Lanarkshire). This is targeting an increase in the
number of public EV chargers for Lanarkshire communities by over 200%
and increasing the number of public EV chargers in Scotland as a whole by
around 14%. The additional ca.10MW of EV charging capacity, an increase
of 360% in Lanarkshire, is expected to accommodate the charging of
around 5000 more EVs.
By choosing charging locations that make effective use of the existing
electricity network, Project PACE is expected to achieve between £30,000
and £60,000 average savings on electricity grid connection costs per new
EV infrastructure location. This equates to a total of between £1.3 million to
£2.6 million of taxpayer money saved across all of the current planned sites.
Scaling up this DNO-led site selection activity to the whole of Scotland
would cost ca. £7.5 million and could save more than £26 million in
estimated connections costs. Rolling out this DNO-led framework across
the whole of the UK would cost ca. £94 million and could save more than
£310milion in estimated connections costs.
16 EV Fleet Accelerator Findings and Recommendations 172.
Enabling the UK-wide Summary of recommendations:
rollout of charging • DfT to set out a clear funding framework
to leverage private investment in charging
infrastructure infrastructure
• DfT/Ofgem to expedite the deployment
of existing funds and public investment in
“below ground” infrastructure to accelerate
the roll out of ultra-fast charge points
• ‘Fast track’ EV charging infrastructure in
the planning system to support the rapid
development of ultrafast charging sites
• Local Authorities required to support
the growth of charging hubs, alongside
on-street charging infrastructure
• Assess and prepare for the scale of the
existing and future workforce skills base
18 192. Enabling the UK-wide rollout of charging infrastructure
Overview For public charging, a key challenge for CPOs is ensuring that the right
charging infrastructure is installed in the right places, at the right time.
This ensures that it is useful to drivers and justifies the investment. Whilst
There are over 500,000 electric vehicles (pure electric and plug-in hybrid) on the road existing developments such as forecourts, car parks and other locations will
in the UK today, with more than 200,000 home charging points and 40,000 public host a significant number of charge points, many new sites will be required.
charging points installed.8
The expansion of public charging is already happening at pace, with the
Compared with the 30 million ICE cars and vans in the UK, charging infrastructure – investment being led by the private sector. Similar challenges to home
home, workplace and public – will need to scale up significantly to meet the needs of charging may emerge in terms of having a sufficient and appropriately
the market. It is estimated that around 40% of UK households do not have access to qualified workforce to meet the installation needs. There are potentially
dedicated off-street parking, which would allow them to charge at home9, so whilst thousands of new ‘green’ jobs that would be created through building the
estimates suggest that there will be more than 8 million home charging points by 203510, charging infrastructure in the UK. This, combined with the changes required
millions of private motorists and fleet drivers will be reliant on out-of-home charging. in maintaining the EV Fleet, will result in workforces having to adapt to
Cambridge Econometrics forecast a need for 300,000 public charge points by 2030.11 encompass a wider range of skills and capabilities. In turn, this will require a
comprehensive plan for apprenticeships and further learning.
To date, the EV charging infrastructure sector has kept pace with the EV market and
arguably staying ahead. Current utilisation levels on public charge points are estimated The public sector also has a critical role to play, particularly in the rollout
to be less than 25% on average. However, analysis suggests a dramatic acceleration in of on-street charge points. Local Authorities are working with CPOs to
roll out will be needed in the next five years – five times faster than the current rate.12 install kerbside charge points, mainly aimed at residential use and overnight
To encourage continued private investment in more charging infrastructure, the supply charging, with the benefit of the UK Government’s On-street Residential
of EVs – and particularly BEVs – to the UK market must increase to ensure the business Chargepoint Scheme grant funding. While on-street charging is seen as a
case is clear. Accelerating the electrification of fleets is an ideal way to stimulate this convenient solution for those who do not have off-street parking at home,
further investment in infrastructure. there are challenges around the installations themselves – including the
additional street furniture required – as well as how they are used, including
accessibility issues, both for users and bystanders. Ultra-fast charging
The challenge hubs, with the requirement of increased grid capacity may be logistically
preferential and the best option for some consumers, including fleets, rather
If a driver can charge at home, it is likely that they will do so, although there will be greater than slower on-street charging15, recognising that new solutions are being
prospects of network constraints once a higher proportion of the population in specific developed all the time.16
local areas switch to electric vehicles. Flexible charging will help, as even now, only
around 1 in 10 home charging points are used every day13, and smart charging of various
degrees will further lessen the demand during peak periods14, although these won’t solve
all issues in relation to increased electricity demand and network reinforcement will also
be required. A future challenge around home charging lies in having sufficient installation
The investment
capacity to ensure all drivers who want one can get one installed expediently. This CPOs are investing significant amounts of private capital in expanding the
may result in a further reliance on the public charging infrastructure beyond those that charging network in the UK. Chargers are generally simple to use, easy to
currently do not have off street parking, in particular impacting cities. find and increasingly utilising contactless payment terminals. We are also
seeing the emergence of partnerships that provide ‘cross-acceptance’ or
‘roaming’ for customers of one charging network to use the charge points
8
https://www.zap-map.com/statistics/ on another provider’s network, and we expect to see further development in
9
EV Energy Taskforce, A Common Strategic Understanding of the Requirements of the Energy System to Support Mass EV
this area.
Uptake, 2020 https://evenergytaskforce.com/reports/work-package-one/
10
https://www.smmt.co.uk/09/2020/billions-invested-in-electric-vehicle-range-but-nearly-half-of-uk-buyers-still-think-2035-
too-soon-to-switch/
11
The impact of a 2030 ICE phase-out in the UK (camecon.com)
12
Charging Up | Policy Exchange
13
bp pulse data
14
EV Energy Taskforce, Energising Our Electric Vehicle Transition, November 2019 – https://evenergytaskforce.com/ 15
https://es.catapult.org.uk/reports/on-street-parking-and-electric-vehicles/
https://www.gov.uk/government/publications/smart-meter-electric-vehicle-charging-competition-
16
winning-projects/beyond-off-street-smart-meter-electric-vehicle-charging-competition-winning-projects
20 EV Fleet Accelerator Findings and Recommendations 212. Enabling the UK-wide rollout of charging infrastructure
Investments are also being made to improve reliability, including in upgrading legacy • 300,000 destination charge points
charging equipment. Businesses are estimated to be investing nearly £16 billion in EV • 27,000 forecourt/motorway ultra-fast/rapid chargers
charging at their own sites.17 The Society of Motor Manufacturers and Traders, SMMT
estimates that a similar amount will be needed to be spent on the rollout of the public The Rapid Connection Fund is a good start and much needed. Installation of
charging network.18 chargepoints at fleet depots and businesses is proving to be another key area
of market failure. We have already made the case that conversion of business
A significant amount of the electrical infrastructure investments to enable this have fleets to ZEVs will be central to achieving the 2030 ambition. But the need
already been committed. Ofgem has announced that £300m, coming from existing and for companies to install multiple chargepoints at individual sites in order to
future allowances, will be invested via DNOs to increase grid capacity at 39 motorway convert their fleets can trigger prohibitive connection costs. An additional
service areas. We welcome this as the first of what we hope will be many interventions fund that supports businesses in meeting these connection costs will help
by Ofgem. The Government announced the Rapid Charging Fund (initially £500m, but accelerate the EV transition.
now £950m) in March 2020, to bring the necessary grid capacity to motorway and key
A-road sites. Further clarity and timescales are needed on the deployment of this fund.
Quicker deployment of agreed
The offer from industry enablement funding to meet future
The private sector will deliver the vast majority of the public charging infrastructure ultra-fast charge point targets
that the country will need over the next 10 years and beyond. Where utilisation is
expected to be sufficient, the business case for investment is already being made, and As noted previously, Ofgem has announced that £300m, coming from existing
expansion is underway. Some CPOs have already invested in grid upgrades to provide and future allowances, will be invested via DNOs to ‘rewire Britain’. This work
ultra-fast charge points, where economical. to unlock grid constraints needs to be carried out expediently so that the
investment from CPOs can follow on quickly thereafter. The 39 sites identified
The private sector is committed to working with Local Authorities and the public sector for investment have the grid capacity to unlock the equivalent of 1,800 ultra-
bodies to offer best practice advice and guidance around EV charging installations, fast chargers along the strategic road network. However, it is not practical for
including providing the resourcing to cover charge point rollouts in specific areas. so many chargers to be deployed at each site in the short term, particularly
However, it is clear that many Local Authorities lack the in-house experience or overall with existing logistical and contractual constraints. Further investment in
resources needed to deliver effective charging schemes in their areas, and therefore grid capacity is needed to meet the government’s target of 2,500 ultra-fast
the structured sharing of expertise is critical. chargers by 2030. In addition, the £950m Rapid Charging Fund to deliver the
required grid capacity at motorway and key A-road locations for ultra-fast
charging needs to be available as soon as possible. The Rapid Charging Fund
was initially announced in March 2020 and almost doubled in size towards
The ask of Government and regulators the end of 2020 but is still not in market. Government should action the
deployment of these funds with immediate effect.
The Government should set out a clear funding framework to support the deployment
of charge points across the country, leveraging private investment to ensure that all
Unlock land and get charging sites
communities benefit from the move to clean transport. The funding framework needs
to take a holistic review of the funding measures to date against the required spend
to support a rapid deployment of charging across the country. The framework would
assess gaps in DNO connection costs and Rapid Charging Fund to enable private
developed more quickly
investment to support future:
The private sector needs to be able to access a greater number of suitable and
• 8 million on-street, mainly residential charging points attractive locations for expanding the UK’s public charging infrastructure. Central
• 500,000 workplace and depot charge points and local government can help deliver this, by working together to identify
and offer sites for development. Any sites and locations for charging should be
suitable for local residents’ needs, whether that be on-street, rapid hubs or other
Centrica Business Solutions found that companies are planning to invest 15.8£ billion in EVs and on-site charging points
17
charging solutions. The Government may also wish to consider the merits of a
over the twelve months to March 2022. ‘right to charge’ duty on Local Authorities, to ensure residents, including those
18
https://www.smmt.co.uk/09/2020/billions-invested-in-electric-vehicle-range-but-nearly-half-of-uk-buyers-still-think- driving fleet vehicles, have sufficient infrastructure to meet their needs.
-2035too-soon-to-switch/
22 EV Fleet Accelerator Findings and Recommendations 232. Enabling the UK-wide rollout of charging infrastructure
Government can also enable the quicker development of sites by giving EV charging
installations – or at least those of a certain scale or significance – through the
Introduce an EV Training Standard
introduction of ‘fast-tracked’ planning processes to ensure the rapid development and
To prepare for increased demand the UK Government should consider
commissioning of sites.19
mandating a new ‘EV Training Standard’, encompassing all aspects of
electric vehicle repair, including ADAS calibration. To achieve this, we believe
While new charge points are being installed frequently, there are some constraints on
reforming the existing Apprenticeship Levy by broadening the eligibility
the ability of CPOs to install in certain locations. For example, exclusive arrangements
criteria would enable firms to draw down on the levy to upskill all technicians,
at motorway service areas mean that most EV charging networks are unable to expand
whatever their age, incentivising companies to invest earlier than planned.
the provision of charging at these sites. The Competition and Markets Authority (CMA)
are currently carrying out a market study and have identified this issue as a barrier to
growth. The recommendations should be implemented to unlock investment by CPOss
and provide more choice for consumers. VAT disparity between home and public
charging costs
Ensure the right education and training Whilst not directly related to fleets, public charging for EVs is rated at 20% VAT
opportunities are provided compared with 5% for home charging. The cost differential is exacerbated by
those with home charging being able to access cheaper, dynamic overnight
tariffs, that further reduce the price they pay. Whilst equalising VAT rates will
Given that there will be a huge demand for sufficiently qualified electricians and
not bring about parity in overall price, a standardised 5% rate would address
electrical engineers, we need to support the education, training and retraining of our
some of the inequity that currently exists and provide some incentives for small
future workforce. To make the step change, consideration needs to be given to the
business and independent traders to transition to electric vehicles and vans.
promotion of STEM topics in schools, the role of apprenticeships, and identifying skills
sets that could transition, with some training into these growth sectors.
There is also an immediate upskilling requirement to support the transition. Vehicle
maintenance and repair for van fleet and the broader car parc is fundamentally
changing meaning repair techniques associated with battery technology and Advanced
Driver Assistance Systems (ADAS), using sophisticated sensors linked to the latest
software, will be needed to ensure safe repair. The nature of the repair challenge means
that an average job is now taking 20% longer due to the pace of technological change.
To put this in context, certain car models now have up to 20 sensors that require
Direct Line Group case study
calibration and will be reflected in van fleets we intend to purchase.
As ownership of electric vehicles increases, training future entrants and existing
technicians in new repair methods is essential. This upskilling should go hand in hand with Direct Line Group provides 4 million in-force motor insurance policies
infrastructure upgrades and charging point installation to ensure the skills exist in the UK where customers are supported by 22 Auto Services repair centres
body shop industry, providing fleet owners and consumers with further confidence. throughout the UK. It is one of the largest body shop businesses
in the UK, employing over 1,400 with 700 hands-on technicians
repairing vehicles. Direct Line Group also operates a partnership
network with other body shop suppliers around the country.
Direct Line Group has already trained 19% of its technicians in
electric vehicle repair. All technicians will need to undergo training,
with 30% requiring in-depth EV education where the sophisticated
nature of EV repair, ADAS calibration and diagnostics, and
manufacturer accreditation is creating upskilling requirements.
19
Vehicle to Grid Britain project, June 2019 – https://es.catapult.org.uk/reports/vehicle-to-grid-britain/
24 EV Fleet Accelerator Findings and Recommendations 253.
Overcoming demand Summary of recommendations:
obstacles • Increase capital support for grid
reinforcement costs
• Increased coordination between DNOs
and sharing of best practice
• Introduce secondary legislation ensuring
charge points meet certain minimum
standards
• Increase transparency on publicly
available charge points for use across
businesses and public domain
26 273. Overcoming demand obstacles
Overview Better coordination between different
As demonstrated in this report, there are extensive commitments from the private capacity off-takers at local level
sector to increase the uptake of electric vans within their operations. However,
as firms seek to plan and take forward their investments, there are a number of Businesses apply separately to the DNO for electrical capacity increase.
obstacles, including availability of infrastructure and supply of suitable vehicles, that The cost per off-taker could be reduced if multiple off-takers were to
are preventing UK fleet operators from making the switch. fund jointly a public infrastructure upgrade. The DNO would be well
placed to play a coordinator role determining if joint investment was
As per the recommendations outlined below, we believe - through collaboration of feasible.
businesses, government and other stakeholders – these can be overcome and at pace.
The nature of business van fleets mean that the needs and challenges differ
between each fleet operator.20 For example, Tesco’s home delivery fleet includes
Ensuring minimum standards for
refrigerated vans that are parked in-store overnight, while Openreach run fleets reliability, safety and interoperability
that are mostly based at-home, so are charged overnight by their drivers. Despite
these differences, we have developed with OZEV the following recommendations OZEV is already consulting on secondary legislation to ensure that
that would benefit all fleets. charge points meet certain minimum standards on reliability, safety and
interoperability reducing the risk of technology obsolescence/stranded
assets. This will provide confidence in the procurement process for larger
Grid reinforcement costs firms seeking to make substantial investments in both EVs and supporting
infrastructure.
EVFA members are carrying out EV van trials at a variety of their depots.
Prohibitively expensive grid reinforcement costs make projects at certain locations
commercially unviable but could be unlocked via public funding. This is especially Improve access to public charging
true for high-power EV charging infrastructure.
networks and ease of comparison
Ofgem have now started a consultation to seek views on proposals relating to
distribution connection charging, definition and choice of access rights, and among tariffs
transmission charging for small distributed generation. We fully support this
consultation as it is important to tackle this barrier to EV adoption whilst weighing Some corporate fleets (as well as SMEs) will have to rely on public
up the efficiency and equity issues of who pays for these connection costs. infrastructure, and complications in using different networks and a lack of
‘tariff transparency’ is a concern and a cost.
The Government funding framework reference earlier should consider support for
grid reinforcement costs, excluding the cost of the charging installation. OZEV is already in consultation in this area. We urge the implementation
of policies which will improve accessibility and price transparency.
20
Consumers, Vehicles and Energy Integration, Fleet Study, August 2017 – https://es.catapult.org.uk/case-studies/consumers-
vehicles-and-energy-integration/
28 EV Fleet Accelerator Findings and Recommendations 294.
Expanding the supply Summary of recommendations:
of UK-made vehicles • Strong demand signal required to give van
manufacturers and the supply chain, the
confidence to plan their investments
• Introduce a requirement for manufacturers to
meet an annually increasing percentage
of vehicle sales that are zero emissions
• Provide long-term certainty about how
government subsidies for EVs will be provided
and how they will be adjusted over time
• Introduce a VAT exemption on the purchase
of second-hand EVs, to help incentivise sales
• Commission analysis reviewing potential
direct investment in UK gigafactories and in
the re-fitting of existing manufacturing plants
30 314. Expanding the supply of UK-made vehicles
Overview The EVFA companies are willing to commit to buying 70,000 British EV
van before the end of the decade, i.e. 10% of the estimated total in order
to kick-start this process – provided good progress can be made on the
The diversity of businesses that are making the transition to EV Fleets means a wide rest of the agenda set out in this report. The scale of this unprecedented
range of EV requirements and customisations will be required. demand can provide the confidence to vehicle manufacturers and the
Currently there is only one mass produced UK electric van. Analysis undertaken by supply chain on the investment in necessary vehicle production and
the UK Electric Fleets Coalition and EV100 group found: gigafactories supporting the >800,00023 people currently employed in the
• EV100 members have seen an 111% increase in EV vehicles in the past year, UK automotive industry and new green jobs created by the transition.
with nearly 170,000 EVs deployed by their membership.21
The EVFA is also willing to consider developing the means to provide
• However, in the most recent EV100 Progress and Insights Report, 64% of
meaningful aggregate data to UK Government and manufacturers on
members noted the lack of correct vehicle type was a significant barrier to
what types of vehicles will be needed, and on what time frames, in a
increasing their uptake of electric vehicles.22 This is a particularly acute issue for
commercially sensitive way. However to deliver these measures, fleet
the supply of more specialist electric vans.
operators need policy change and stronger and clearer commitments
from UK manufacturers.
Long lead times, lack of choice (or no option at all for some vehicle types) and lack
of availability are all challenges companies face, in turn making it harder to deliver
on the commitments made to the EV transition. Competition between companies
that are bulk buying EVs could be a further barrier to a successful transition, if supply
does not increase.
The ask of Government and regulators
Government can make a significant difference to the effective functioning
Government and industry need to work together to increase the supply and choice of the EV market. It can increase the investment grants and incentives
of commercial vehicles, promoting the most competitive market possible in both that are available and provide greater certainty about how these will be
UK manufacturing and access to other markets. It is unlikely that every need can adjusted over time (critical given the long-term investment decisions firms
be competitively met by EV vehicle manufacturing in the UK so we need trade will take). It can also place new requirements on manufacturers to increase
arrangements, as now, that support exporting UK production overseas and imports to up front supply.
meet the diversity of needs required. The potential benefits are huge, in terms of green
jobs and the wider supply chain which is of strategic importance to the country. Although the funding announced to date is welcome, we believe that
Government needs to go further, and should be considering what direct
contributions it could make to the financing of:
The offer from industry • The re-design of existing plant by larger and more established
manufacturers (which will be needed alongside the new sites being
UK businesses with large commercial fleets are leading the way. However, despite built by producers such as LEVC and Arrival). This can be complex
substantial fleet commitments already set by UK companies, there remains a ‘chicken and costly to transform from existing petrol/diesel production to
and egg’ dilemma, where insufficient demand is preventing the ramp-up of EV van EV supply.
production, and the lack of EV van production is inhibiting the adoption by van fleets. • An expansion in the number of gigafactories in the UK that can
produce sufficient batteries to allow local manufacturers to compete
The EV Fleet Accelerator coalition, which includes some of the biggest van fleets in with rivals, for example in continental Europe. This will be critical
the UK, is able to send a substantial demand signal to the vehicle manufacturers and after 2027, when a vehicle will require a battery sourced within the
supply chain in order to break this cycle. EU or UK if it is to qualify for zero tariff trade under the UK/EU Trade
and Co-operation Agreement.
21
https://www.theclimategroup.org/sites/default/files/02-2021/EV20%100Progress20%and20%Insights20%Report.pdf 23
UK Research and Innovation – Advanced Propulsion Centre
22
https://www.theclimategroup.org/sites/default/files/02-2021/EV20%100Progress20%and20%Insights20%Report.pdf
32 EV Fleet Accelerator Findings and Recommendations 334. Expanding the supply of UK-made vehicles
Figure 4 – Post EU Exit and the UK/EU TCA, competition in battery production is increasing24
New requirements on manufacturers
EU public spending on established battery supply exceeded We support the introduction of a ZEV van mandate: a supply-focused
€3.2Bn in 2019 with regional governments taking significant policy that requires a gradually rising percentage of vehicles sold by
steps to attract the right players in local markets manufacturers to be zero emission.
Source: Company data, Morgan Stanley research, EY Parthenon analysis
A ZEV van mandate would underpin the accelerated ICE phase-out, with
Germany a clear trajectory to increase the supply of ZEVs. This would give van
CATL: Planned 60GWh by 2026
SKI: Planned 7.5GWh by 2020 manufacturers clarity and an incentive, as well as giving fleets owners and
BMZ: Planned 8GWh by 2022 GSR Capital
Northvolt: Planned 12GWh by 2020
other buyers confidence to commit to ambitious ZEV targets.
Farasis: Planned 6GWh by 2022
Northvolt
(32GWh by 2023)
Long-term certainty about
vehicle grants
Announced capacity
AESC (2GWh)
CATL
Existing capacity Britishvolt
Tesla LG Chem
Northvolt
(70GWh by 2022)
The UK’s plug-in vehicle grant has been a hugely successful scheme,
BMW
Expansion plans on top
SKI enabling the purchase of 100,000 ZEVs since its introduction.25 However,
of existing capacity Farasis
Verkor the unpredictable nature of reductions has caused significant disruption
Samsung SDI
BMZ
(15GWh by 2020)
for fleet operators, both in terms of future planning as well as purchasing.
Samsung
ACC (PSA-SAFT) SDI Grant reductions announced without forewarning or consultation can halt
SKI
(2x24GWh by 2030) (7.5GWh by 2022) sales already in process, which has both a direct impact on that buyer and
reduces trust in the scheme.
An alternative model would be for grants to accurately reflect the cost-gap
between Internal ICE vehicles and ZEVs ensuring that there is a continuing
• European Battery Alliance launched in 2017 to create a battery manufacturing value chain in Europe and Strategic Action financial incentive to transition to electric until price parity is reached. More
Plan on Batteries 2018 to promote integrated European approach (from access to raw materials to skill development) transparency and consultation about the methodology that will be used
• €3.2b in public funding approved in 2019 to support the battery industry, with second funding package expected
to be approved by the end of 2020 to adjust or amend grants over time is also important: this would increase
• Battery 2030+ (R&D) program, partnering research institutes and private companies, with €42m funding over 3 companies’ confidence and readiness to commit to more ambitious EV
years and €10m to research next-generation lithium-ion batteries targets, especially in the case of vans and specialist vehicles that are
€1.25b
further away from price-parity than cars.
Of which €300m
Announced total support for EV Of which €1.3b German Govt. (BMWi) grant to Varta
battery production via IPCEI Total funding to ACC (Saft-PSA
JV) by German and French Govt.
€960m
Announced support for battery cell
to construct 2 gigafactories
(financial structure TBD) 0% VAT on second-hand EVs
production over next 5 years via IPCEI
Fleets are a significant driver of the second-hand market, with many
Up to 70%
€250m €95m €480m €550m second-hand cars coming from ex-fleet models. However, the majority of
Corporate tax breaks
EBRD loan to LG Chem Grant to LG Chem EIB loan to LG Chem SK Skate Bank loan
to LG Chem current incentives are aimed at the new car market, meaning the second-
€350m €44.3m €52m €625m hand market remains a barrier, not an enabler, for sole-traders and small
EIB loan to Nordic investment EIB loan for German Govt. Loan businesses who would want to make the transition to EVs.
Northvolt bank loan Northvolt Demo line Guarantee for NV
We recommend a VAT exemption for second-hand EVs, which could
€108m Special economic zones
State aid to Samsung With tax relief for EV producers incentivise sales and broaden access, faster, to EV technology.
24
UK Research and Innovation – Advanced Propulsion Centre 25
https://www.gov.uk/government/news/plug-in-vehicle-grants-update-following-todays-budget
34 EV Fleet Accelerator Findings and Recommendations 35You can also read
